This archive report was first published on 14 August 2019.
On August 14, 2019, the Kenya Revenue Authority (KRA) announced a significant increase in its recoveries from tax avoidance, reaching Ksh.8.53 billion across the 2018/19 financial year.
This represents a 60 percent increase from the Ksh.5.3 billion recovered in the preceding financial year, marking a notable improvement in the tax authority's efforts to combat tax evasion.
The surge in recoveries comes on the back of increased scrutiny on compliance by the tax man, as well as the integration of a multi-sector approach by the government to nab tax evaders, including the incorporation of the Kenya Bureau of Statistics (KEBS) and the Directorate of Criminal Investigations (DCI).
Furthermore, KRA has enhanced its oversight measures by leveraging innovations in ICT to strengthen enforcement and oversight.
Of the 29 concluded cases, the tax authority has secured a 90 percent success rate in its legal showdowns with tax evaders, with 26 suits resulting in favorable rulings.
According to KRA Deputy Commissioner for Investigations and Enforcement Edward Karanja, the tax authority has implemented various measures to detect tax evasion, including the use of informers, third-party information from social media, departmental referrals from other agencies, and data from auditor general reports.
“You can run but you can’t hide,” Karanja said, emphasizing the tax authority's commitment to cracking down on tax evaders.
The introduction of enhanced screening to detect the concealment of goods on transit has also led to a significant increase in revenue collections from customs and border control, exceeding the tax head's three-year average growth trend of 9.5 percent.
Recoveries from tax cheats were highlighted by the netting of several high-end vehicles that landed at the port of Mombasa while disguised as basic household commodities.
Going forward, KRA aims to shift its legal focus to the acquisition of plea-bargains from tax evaders to ease its push towards full tax compliance.
Additionally, the tax authority has engaged the Chief Justice to establish tax-specific courts, with the aim of fast-tracking the prosecution of tax evasion-related probes.
With a renewed focus on combating tax evasion, KRA has set its sights on the prosecution of 600 new tax-evasion linked cases in the current financial year, while readjusting its recovery targets by a further Ksh.5 billion to Ksh.15 billion, aiming for a 95 percent probing success rate.
